 The effect of natural disasters on housing prices: An examination of the Fourmile Canyon fireKatherine Kiel and Victor Matheson Journal of Forest Economics, 2018, vol. 33, issue C, 1-7 Abstract: In September 2010, the Fourmile-Lefthand Canyon forest fire burned 6181 acres, destroyed 169 homes, and caused $217 million in property damages making it by far the most expensive fire in Colorado history at the time. This paper examines how the fire affected housing prices in vulnerable neighboring areas that were not directly impacted by the fire, controlling for the property’s level of risk. This damaging fire may have increased home owners’ perceptions about the risk of living in forested areas subject to wildfires to a significant degree adding to the total direct economic losses from the fire. Utilizing a unique fire risk data set and a difference-in-difference approach, we test whether buyers of houses in areas with different risk levels prior to the fire adjust expectations differently. We find buyers in the highest risk area are most likely to change their perceptions in response to a fire with houses in these areas experiencing a statistically significant 21.7% decline in sale price compared to houses in non-risky areas. Keywords: Disasters; Forest fires; Housing; Climate change (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:foreco:v:33:y:2018:i:c:p:1-7 Ordering information: This journal article can be ordered from DOI: 10.1016/j.jfe.2018.09.002 Access Statistics for this article Journal of Forest Economics is currently edited by P. Gong and R. Brännlund More articles in Journal of Forest Economics from Elsevier |
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